Third of pubs see profits halved as furlough rates remain high

Around a third of pubs have seen their profits slashed by more than half and furlough rates continuing to soar despite welcoming customers back, according to new research.

The Office for National Statistics said confidence in the pub industry has increased in recent months but 33% of landlords still suffered “significant profit losses” last month.

The ONS stressed that this represents an improvement after heightened restrictions around Christmas resulted in “huge losses in trade” at the end of 2020.

However, current levels remain significantly worse than across other areas of UK industry, with only 9% of all UK businesses reporting similar losses.

The Economies Of Ale report also revealed that furlough rates are still significantly higher than average, while confidence levels are also typically weaker than in most other sectors.

The survey showed that just over a fifth (24%) of pub businesses had high confidence of surviving the next three months, compared with around 44% for all types of company.

Nevertheless, the ONS said this reflects a recovery in optimism, with only 1% of pub owners saying they were highly confident about their future in early February.

The statistics body also said there has been a recent rebound in the number of pub landlords reporting “low confidence” in their future.

In November, around 63% of business operators said they had low confidence, with this plunging to 3% by April, amid the reopening of beer gardens and outdoor spaces.

However, the latest survey, taken shortly before the indoor reopening on May 17, showed 19% of firms reporting low confidence over their future prospects.

The research also revealed that 55% of all pub staff were still on furlough in early May, compared with around 8% of the UK’s wider workforce.

Furlough support is set to reduce from next month with further cuts until it is axed completely at the end of September.